• E-fuel

New Option to Promote Decarbonization of Automobiles

Interest in so-called electrofuels that can reduce greenhouse gas emissions is growing worldwide. Japan needs to promote the wider use of such fuels as soon as possible as they are one option for decarbonizing cars and other vehicles.

Electrofuels, or e-fuels, are a form of liquid fuel, also called “artificial crude oil,” made from hydrogen and carbon dioxide.

Carbon dioxide emitted from factories and other facilities is captured and chemically reacted with hydrogen to make e-fuels. Hydrogen is extracted by electrolyzing water. It is a precondition that the electricity required for this process comes from renewable energy sources such as solar power.

E-fuels can be used in existing gasoline-powered vehicles as well as aircraft and ships, which are difficult to electrify. Tanker trucks, gas stations and other facilities can also be used with e-fuels as is.

Although carbon dioxide is emitted when e-fuels are burned, emissions are considered to be virtually zero because carbon dioxide is used as a raw material during e-fuel production.

Electric vehicles currently play a leading role in the decarbonization of automobiles. However, challenges remain, such as expanding recharging facilities and securing rare metals to make batteries. It is hoped that the use of e-fuels will become a new option.

In 2021, the Economy, Trade and Industry Ministry set a goal of commercializing e-fuels by 2040, but it plans to bring forward this goal to the early 2030s.

Among domestic companies, oil firms and other businesses are engaged in e-fuel research and development. Eneos Corp. aims to begin supplying the fuel in a form blended with gasoline in 2027.

Although a production method has already been established, the biggest barrier to commercialization is high production costs.

Because a large amount of electricity is required to produce hydrogen, e-fuel would cost about ¥700 per liter if all the hydrogen is produced in Japan, where the cost of renewable energy is high, according to the ministry. Even if less expensive hydrogen is procured from overseas, it would cost about ¥350 per liter. This is substantially more expensive than gasoline prices.

A system to produce large quantities of hydrogen domestically or to secure it from overseas is not yet in place. The public and private sectors should quickly build supply chains to stably procure inexpensive hydrogen. It is also necessary to reduce the cost of renewable energy in Japan.

Overseas, the European Union, which had previously decided to ban the sale of all new combustion-engine cars in 2035, changed the policy in March this year to allow the sale of cars that run on e-fuels.

This is reportedly because Germany was concerned that a full transition to EVs would result in the loss of jobs in the auto sector that is the country’s core industry, as it is in Japan.

The challenges facing the auto industry are the same in Japan. The government should work with Germany and other countries to reduce the cost of e-fuels and develop supply chains.

(From The Yomiuri Shimbun, June 10, 2023)